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2010 Mazda3 (Mazda)
2010 Mazda3 (Mazda)

Deals of the Week

Five car-buying terms you should know Add to ...

The Mazda3 compact is now the best-selling car in Canada and Mazda's sales overall were up in May, a month in which car sales overall were down 10.6 per cent.

If you follow us week-to-week, you know we smell a deal or two when we see an auto maker out-performing the market.

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But before we get to the details, have a look at these tips from www.carcostcanada.com (CCC). Having sold cars myself for a brief time, I can vouch for them.

The people at CCC call this list the "five most important car-buying terms you need to know before you buy a new car." If nothing else, they'll help you appreciate the deals we chronicle here.

MSRP: Officially, this is the manufacturer's suggested retail price. Unofficially, CCC calls the MSRP "the price the dealer wants you to pay." The list or sticker price is what the manufacturer says is a fair price for the dealer to charge. Buyers rarely pay this amount, however.

Dealer Invoice Price: This, says CCC, is the price the dealer pays - and the dealer starts paying it as soon as any vehicle is delivered - typically via a prearranged line of credit. Remember, the dealer starts paying interest on whatever loan or credit line is being used to cover the cost of vehicles. That's one reason why dealers are motivated to move along vehicles already in stock, on the lot.

Hold Back/ Marketing Assistance: "Most manufacturers help subsidize the interest charges and marketing/advertising that a dealer incurs by paying the dealer a holdback and or marketing assistance dollar amount, after the vehicle has been sold. This amount typically ranges from 2.0 per cent to 2.5 per cent of the dealer invoice price." Obviously this is money in the dealer's pocket and helps explain why many dealers will "typically accept an offer of only 3-5 per cent more than the dealer invoice price."

Factory to consumer incentives: CCC calls these savings on the negotiating table waiting for you to pick up. Incentives stimulate sales, of course, and include cash-back bonuses, cut rate financing and other sweeteners. Some of these can be "stacked" or combined, some not.

Factory to dealer incentives: These often are hidden or kept secret by the dealer in negotiations for a new vehicle. Most dealers factor incentives into negotiations, though not all will explain the details. They are also stackable or not, depending on the circumstance. You will never find factory to dealer incentives advertised.

As for Mazda, here's what we found on the Mazda3 and the Mazda Tribute small SUV (sport-utility vehicle), based on numbers sourced from www.carcostcanada.com:

2010 Mazda3 GX automatic:

MSRP: $17,195

Freight, dealer prep, air conditioning tax: $1,495

Dealer discount (estimated): $500

Factory discount: $2,000 (Mazda Retail Cash, factory-to-dealer rebate; cash purchases only)

Taxable subtotal: $16,190

Total price with 8 per cent PST and 5 per cent GST: $18,294.70

0.0 per cent finance for five years available, but cannot be combined with Cash

2010 Mazda Tribute GS FWD automatic:

MSRP: $24,745

Freight, dealer prep and air conditioning tax: $1,695

Dealer discount (estimated): $1,000

Factory discount: $4,500 (Mazda Retail Cash, factory-to-dealer rebate; cash purchases only)

Taxable subtotal: $20,940

Total price with 8 per cent PST and 5 per cent GST: $23,662.20

0.0 per cent finance for five years available, but cannot be combined with Cash

2010 Suzuki SX4 hatchback: Note that the 0.0 per cent financing for up to 84 months can be combined with other offers.

MSRP: $17,695

Freight, dealer prep and air conditioning tax: $1,495

Dealer discount (estimated): $500

Factory discount: $750 (Stackable Cash, factory-to-dealer rebate)

Taxable subtotal: $17,940

Total price with 8 per cent PST and 5 per cent GST: $20,272.20

2010 Acura MDX:

MSRP: $51,990

Freight, dealer prep and air conditioning tax: $1,995

Dealer discount (estimated): $2,000

Factory discount: $4,500 (Non-stackable Trading Dollars factory-to-dealer rebate)

Taxable subtotal: $47,485

Total price with 8 per cent PST and 5 per cent GST: $53,658.05

Pricing information source: www.carcostcanada.com.

Globe Drive's senior writes explains the auto industry, and what it means to you

 

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